Are you a Canadian citizen considering a mortgage on a Florida property? If so, read on because we’ll tell you everything you need to know about foreign national financing in the Sunshine State.

Some say that getting a mortgage in the U.S. is a complex process, particularly for non-residents. But as someone who’s been a mortgage professional on both sides of the border for years, I can tell you that’s not true, assuming you have the right guidance.

This comprehensive guide will demystify the Florida mortgages for Canadians, helping you make an informed decision.

The Best Mortgage Advice You Can Get

My husband and I moved from Canada to Florida a few years back. We financed our first home, and boy, was it a nightmare. What I learned in that experience inspired me to never let this same thing happen to my clients.

I'll spare you the details but suffice it to say, the documentation process was like pulling teeth, the mortgage banker made numerous mistakes, the lender did not honour its initial rate guarantee, and there were surprise fees galore.

At Huli Financial, we hate surprises, and our clients do too. We go out of our way to stick handle the process to make the process feel seamless.

In that spirit, here are six things to remember when applying for a mortgage as a Canadian:

1. Consider all your options

If you have ample liquid assets in Canada, you can pay for a Florida property in Cash. Sellers like cash buyers, and it cuts down your initial fees. 51% of Canadians made all-cash purchases in 2022, according to the National Association of Realtors (NAR).

The risks are:

• You may be able to earn a higher return investing that case elsewhere, versus tying it up in a property
• Investors lose the tax deduction on interest expense
• You may or may not time the currency exchange well, whereas a mortgage spreads out currency risk over time.

If you'll retain a Canadian property and have enough equity, you can also use a HELOC or equity take-out mortgage on your Canadian home to fund the Florida purchase. Our Canadian affiliate, whom we work closely with, can help you with that — as it's sometimes more cost-effective. It also lets you make payments in Canadian dollars.

2. Not all Florida lenders are created equal

Most lenders in the state will not lend to Canadian buyers unless they're permanent residents. The ones that will lend range from fantastic to horrid. Experience has taught us which lenders to avoid, and which want to make your experience a positive one.

As brokers, we can also connect you with lenders willing to provide common sense financing solutions designed specifically for foreign nationals and temporary U.S residents with harder-to-prove income situations.

3. Good credit helps

Lenders consider non-resident financing riskier, so they try to minimize risk by lending to creditworthy borrowers. You'll want to have a credit score over 700, assuming you want to avoid high rates and fees.

4. Get these documents ready

Most lenders will want to see:

• A valid passport or proof of citizenship
• A valid visa (for permanent residents who are not U.S citizens)
• A drivers license
• Proof of assets (e.g., 2-3 months of statements for each account you own)
• Proof of employment/income (e.g., two years of T4s or T1 Generals)
• Proof of down payment origin by way of two months bank statements
• Homeowners insurance for any properties owned (with hurricane and flood policies if applicable)
• Mortgage and property tax statements for any other mortgaged properties.

Income proof may not be required for non-prime investor financing or private financing.

The lender may also pull an international credit bureau to check your credit score and repayment history.

If you're buying in a trust, you'll need a copy of the fully executed trust agreement.

If you're buying in a company name, have a copy of the formation documents (e.g., articles of incorporation or fully executed LLC operating agreement), certificate of good standing and IRS employer ID number.

5. Get your down payment ready

Typically, non-U.S. resident borrowers and temporary residents of the U.S should expect a down payment amount of 25% to 30% of the purchase price. We have some lenders that can consider 20% for extremely well-qualified buyers. We also have lenders that are more flexible with 35%.

Some lenders consider applicants who use gifted funds from relatives for the down payment. However, a seasoning period may be required for gift funds, meaning the funds must be in your possession for a minimum period like 30 or 60 days.

Remember, buying a home in Florida can be a great investment opportunity, but it requires careful planning and consideration. Seek professional advice, understand the market, and choose the best financing options to make your move to the Sunshine State a successful one.

6. Choose a mortgage advisor who cares

Huli Financial is strategy driven, and the #1 thing we care about is your happiness. We're not transactional brokers who you never hear from after your property closes. We're here to support you anytime you have post-closing mortgage questions. And we remain a resource for all your future Florida property financing questions. 

One thing that sets Huli apart is that we care about minimizing borrowing costs. We have access to some of the best most reputable wholesale lenders in the business, including some with very aggressive rates. We compare all the dozens of lender options available to us to ensure you enjoy the most competitive costs possible.

If you're an investor, great! We love financing income properties. In fact, we have multiple clients who are serial buyers in Florida, some of which have built considerable property portfolios.

In Sum

For more information on securing Florida mortgages for Canadians, reach out to me, Melanie McLister, at Huli Financial. My team and I will guide you smoothly through the process and help you understand the most economical way to finance a Florida property.

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Frequently asked questions

Here are the most common questions we get from Canadians contemplating a U.S. mortgage:

What are "points" and do I have to pay them?

Points are lender fees that lower your mortgage rate. And no, just because you're a Canadian getting a U.S. mortgage doesn't mean you have to pay them. We have many lenders that offer mortgages with no points, however it is common to pay points on investment properties so be prepared.

What term should I get?

Unlike Canada, where the most popular term is five years with a 25-year amortization, most American mortgages have 30-year terms and 30-year amortizations.

Although, when rates are high, a 3-year or 5-year adjustable-rate mortgage (ARM) can make a lot of sense. U.S. three-year and five-year ARMs are just like Canadian 3-year and 5-year fixed rates, except the rate starts adjusting after the initial term.

What are other differences between U.S. and Canadian mortgages?

These are some of the more prominent differences:

• Mortgages do not renew in the U.S. like they do in Canada. You have to refinance at the end of your term.
• U.S. mortgages are open, meaning there's no penalty to prepay (any amount you want) or break the mortgage early. The tradeoff is that the closing costs are higher on Florida mortgages.
• U.S. mortgages do not have free rate holds like in Canada. You have to pay to lock in a rate over 30 days. Some lenders do not charge for long-term rate locks, but their overall rates and fees are often higher.
• U.S. mortgages are not portable from one property to another, like in Canada.
• Mortgage interest is deductible on U.S. tax returns, for mortgages up to $750,000. (There is generally no limit on deductibility for non-owner-occupied rental properties.)
• U.S. mortgages take longer to close. That's mainly because the U.S. market is more regulated and there are more steps. Budget on at least 45 days from the start of the application to closing.

How much should Canadians budget for closing costs in Florida?

Closing costs are very different in the U.S. (read, higher) than in Canada. Many such fees do not even exist in Canada, but they're required to close an American mortgage.